The way I see it, they abused their position in the CSM for in game advantages. When one random player betrays another, that's fine. This wouldn't have happened if they weren't on the CSM though, which is something out of game. They should be permanently banned from both the game and their CSM positions instead of being made heroes.
Eve is all about the meta-game, real world espionage and shenanigans often happens. Its all unofficial but its kind of the unique selling point of Eve really.
Not sure why the one leader was banned trying to get real world information if one of the the selling point is about interacting outside of the game as well.
Why wouldn't it be perfectly valid to attempt to scare or convince this guy in real life to give back the loot. It feels like it should be part of the game. Bonus points for getting someone fired or sleeping with someone's sister.
There's levels. Lying to get access to a groups private information and plans to gain a competitive advantage (spying in other words) is one thing, attempting to dox someone because you've threatened to cut off their hands is another.
CSM positions do not appear to have been abused. Not sure where you're getting this information. The fact that Judge was a CSM member is almost tangential to the whole story.